Suppose That Current Assets, Costs, and Accounts Payable Maintain a Constant

question 359

Multiple Choice

Suppose that current assets, costs, and accounts payable maintain a constant ratio to sales. The firm retains 40% of earnings. If the firm is producing at only 90% capacity, what is the total external financing needed if sales increase 25%?

• A) $1
• B) $34
• C) $41
• D) $47
• E) $94